The Central Board of Direct Taxes (CBDT) has allowed Sebi-approved asset management companies (AMCs) to double as fund managers as well rather than being mere ‘advisors’ to offshore funds.

CBDT has removed a taxation-related rule that prevented such advisors to foreign funds from becoming a direct, “full fledged manager” of such funds out of India. 
It has now been clarified that Sebi-approved asset management companies will be designated as ‘eligible fund manager’ and therefore entitled for benefits under Section 9A of the income tax law. Also, fund management activities carried by Indian AMCs for offshore funds would not be regarded as having a ‘business connection’ and would not result in a taxable presence of such offshore funds in India.

For overseas funds, management by an Indian AMCs will not be construed as Indian presence and therefore, will not be subject to adverse tax consequences and their global incomes will not be subjected to tax in India.

Meanwhile CBDT is seeking to restore 4,000 shell companies deregistered by the ministry of corporate affairs, in a bid to recover lost revenue. In fact, the CBDT has been holding talks with the MCA over this.

Tax collection by the CBDT is reported to be short of revised estimates by Rs80,000-Rs1,00,000 crore.

CBDT has directed its field formations across the country to file applications with the NCLT for the restoration of shell companies.

“There are several (shell) companies with outstanding dues. Once they were deregistered, it became difficult for us to recover our dues.

“If there is no identity of the companies, whom do we chase to recover our dues from? So the applications are being filed for restoration,” a CBDT spokesperson said.

The recovery of dues will not happen overnight. The NCLT has to agree to admit the application, and the deregistered companies have to be restored before the CBDT can look to lay its hands on the dues, the spokesperson added. #casansaar (Source - PTI)